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21. Should the court grant the second broker's motion to dismiss the crossclaim?
The first broker filed an answer and a crossclaim against the second broker. The crossclaim alleged that the second broker underpaid him in violation of federal labor laws. The first broker is seeking $150,000 in damages. The second broker filed a motion to dismiss the first broker's crossclaim.
A man from State A sued two mortgage brokers, both citizens of State A, in federal district court in State A. The man's complaint alleged that the brokers failed to make disclosures required by an applicable federal lending law.
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(i) have arisen out of the same transaction or occurrence as the original action; AND
(ii) ask for actual relief from the co-party.
Crossclaims fall under supplemental jurisdiction because they arise out of the same transaction as the original claim, and supplemental jurisdiction calls for a «common nucleus of operative fact» among the claims. Because supplemental jurisdiction applies to crossclaims, they do not require independent jurisdictional grounds.
C is correct. While the FRCP allow crossclaims, to be properly joined, they must arise out of the same transaction or occurrence as the original action. The court must also have subject-matter jurisdiction over the claim.
Here, although the court would have federal question subject-matter jurisdiction over the crossclaim based on federal labor laws, it may not be joined because it does not arise out of the same transaction or occurrence as the original claim, which is based on federal lending laws.
A is incorrect. Whether the crossclaim satisfies the $75,000 amount-in-controversy requirement is not relevant because there is no need to establish diversity jurisdiction. The crossclaim is based on a federal question. However, the crossclaim should be dismissed because it does not arise out of the same transaction or occurrence as the original claim, as explained above.
B is incorrect. Although the crossclaim does trigger federal question jurisdiction, as a crossclaim, it must also arise out of the same transaction or occurrence as the original claim to be properly joined. Nothing in the fact pattern indicates that the crossclaim against the second broker regarding the violation of the federal labor laws resulted from the same transaction as the man's claim against the two brokers.
D is incorrect. This answer choice states the correct conclusion with incorrect legal reasoning. The court should grant the dismissal of the crossclaim, not because it lacks diversity jurisdiction, but because it does not arise from the same transaction or occurrence as the original claim. Whether diversity jurisdiction exists is irrelevant because the crossclaim is based on federal lending laws, giving rise to federal question jurisdiction.